Question & AnswerQ&A (Republic Act No. 7161)
Republic Act No. 7161 incorporates certain sections of the National Internal Revenue Code of 1977 into Presidential Decree No. 705 (the Revised Forestry Code of the Philippines) and provides amendments to increase the forest charges on timber and other forest products.
Sections 230 to 238 and 297 of the National Internal Revenue Code of 1977 were incorporated and renumbered as Sections 68 to 77 of the Revised Forestry Code (PD No. 705).
These references in the incorporated sections now refer to the Forest Management Bureau, the Director of the Forest Management Bureau, and the Secretary of Environment and Natural Resources, respectively.
The law imposes a charge of 25% of the actual FOB market price on each cubic meter of timber cut in forestland for all groups of timber, except pulpwood and matchwood which are charged at 10%.
Yes, except for mangrove species which are banned from cutting, firewood, branches, and other recoverable wood wastes are charged ten pesos (P10.00) per cubic meter, with only third or fourth group wood allowed unless authorized for first and second group woods under certain conditions.
Forest products not covered by sections on timber and wood wastes are generally exempt, except for rattan, gums and resins, beeswax, gutta-percha, almaciga resin, and bamboo which are charged 10% of the actual FOB market price.
The Secretary of Environment and Natural Resources determines the price once a year with a committee composed of representatives from DENR, NEDA, DTI, BIR, wood and furniture industries, and consumer sectors, using criteria like production cost, species, grade, government share, reforestation, tariffs, taxes, risk, and reasonable profit margin.
The forest charges apply to naturally growing timber and forest products gathered within public forestlands, alienable and disposable lands, and private lands.
Yes, planted trees and forest products harvested from industrial tree plantations and private lands covered by existing tiller agreements or approved land applications are exempt from forest charges.
The provisions took effect fifteen (15) days after their publication in a newspaper of general circulation following the approval of the Act on October 10, 1991.